Manufacturing in the eurozone remained strong in October, but supply chain bottlenecks and supply problems pushed up costs and limited output growth, according to research by IHS Markit.
The ongoing disruption caused by the coronavirus pandemic and the lack of drivers of large trucks have led to product shortages and made it difficult for factories to obtain the raw materials they need.
Although the Eurozone economy continued to grow rapidly in the summer, inflation also exceeded expectations.
European Central Bank President Christine Lagarde acknowledged last Thursday that inflation would remain high for a long time, but rejected market bets that price increases would cause the ECB to raise interest rates next year.
The IHS Markit Manufacturing Responsible Purchasing Ratio (PMI) fell to an 8-month low of 58.3 points from 58.6 in September, but is well above the 50-point mark separating growth from shrinking activity. .
The manufacturing output index fell further, to 53.3 points from 55.6 in September, the lowest level since June 2020.
“Eurozone manufacturing companies reported that the supply chain situation deteriorated in October, significantly reducing output growth during the month,” said IHS Markit chief economist Chris Williamson.
“Average delivery times for raw materials lengthened at a rate that was the third highest in almost a quarter of a century as companies reported that demand was again greater than supply for a wide range of inputs and components,” he added.
These shortages resulted in the input price index jumping to 89.5 from 86.9 points, the highest level since the survey began in mid-1997.